Within the global trend, the US 30 index has declined, leading to a shift towards a downward trajectory. The US 30 forecast for today is negative.
US 30 forecast: key trading points
- Recent data: the US Federal Reserve balance sheet decreased to 6.59 trillion USD
- Market impact: the data has a moderately positive impact on the stock market
US 30 fundamental analysis
Speaking at the National Association for Business Economics conference in Philadelphia, Federal Reserve Chairman Jerome Powell discussed in detail the current stage of quantitative tightening. Although he did not specify when the program might end, Powell noted that there are signs the Fed is nearing its target level of adequate reserves available to banks. While balance sheet management may appear to be a technical issue, it plays an important role for financial markets.
When financial conditions tighten, the Fed aims to maintain ample reserves so that banks can access liquidity and support the economy. As conditions evolve, the central bank targets a sufficient – rather than excessive – level of reserves to prevent surplus capital in the system. During the COVID-19 pandemic, the Federal Reserve significantly expanded its balance sheet through large-scale purchases of US Treasury and mortgage-backed securities, pushing it close to 9 trillion USD.
US central bank balance sheet: https://tradingeconomics.com/united-states/central-bank-balance-sheetUS 30 technical analysis
The US 30 index continues to fall within a downtrend. The resistance level has formed at 46,880.0, while support lies at 45,450.0. At this stage, it is difficult to assess how long the current trend might last. A breakout above the current resistance level would signal a potential resumption of upward movement.
The US 30 price forecast considers the following scenarios:
- Pessimistic US 30 scenario: a breakout below the 45,450.0 support level could send the index down to 44,565.0
- Optimistic US 30 scenario: a breakout above the 46,880.0 resistance level could push the index up to 47,880.0
Summary
Jerome Powell noted signs of gradually tightening liquidity conditions, suggesting that further reserve reductions could hinder growth. The US 30 stock index has been in a downtrend since late last week. Only developments related to the US-China trade conflict are likely to reverse this trend, while economic data remains unavailable due to the government shutdown. The next downside target for the index could be 46,880.0.
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